Candy Craft Creations, LLC v. Gartner et al

Filing 450

ORDER OVERRULING 431 Plaintiff's Objections to portions of the Magistrate Judge's Order on Defendants' Motion in Limine; GRANTING 434 Parties' Joint Motion to Replace Plaintiff's Objections with a redacted copy. Signed by Chief Judge Lisa G. Wood on 12/1/15. (en)

In the United States District Court
for the Southern District of Georgia
Brunswick Division
CANDY CRAFT CREATIONS, LLC,

*
*
Plaintiff,
*
*
v.
*
*
GREG GARTNER; GARTNER STUDIOS, *
INC.; and TYLINA FOOD PRODUCTS
*
CORPORATION,
*
*
Defendants.
*

CV 212-091

ORDER
Presently before the Court are Plaintiff’s Objections to
Portions of the Magistrate Judge’s Order dated October 22, 2015.
Dkt. No. 431.

In that Order, the Magistrate Judge granted

Defendants’ Motion in Limine to the extent that it sought to
exclude evidence of Defendants’ discovery misconduct resulting
in pending monetary sanctions.

Dkt. No. 426, pp. 13–21.

Also

before the Court is the parties’ Joint Motion to Replace
Plaintiff’s Objections with a redacted version.

Dkt. No. 434.

After careful review, Plaintiff’s Objections (dkt. no. 431)
are OVERRULED, and the Magistrate Judge’s Order (dkt. no. 426),
as supplemented herein, remains the Order of the Court.

Additionally, the parties’ Joint Motion to Replace Plaintiff’s
Objections with a redacted copy (dkt. no. 434) is GRANTED.
BACKGROUND
As recounted in further detail in the Magistrate Judge’s
Order, Defendants engaged in certain discovery misconduct early
in the litigation of this case, including failing to produce
tens of thousands of relevant documents in response to
Plaintiff’s discovery requests.
(citing Dkt. Nos. 213, 223).

Dkt. No. 426, pp. 10–11, 13

As a result, this Court ordered

that Defendants disclose the withheld documents and be subject
to monetary sanctions in an amount to be determined at a later
date.

Id. (citing Dkt. No. 223).

In subsequent filings with

the Court, Plaintiff indicated that it intended to introduce
Defendants’ discovery misconduct in the trial of this case, id.
at p. 14 (citing Dkt. Nos. 384, 401), which prompted Defendants
to file a Motion in Limine seeking, in part, to exclude this
evidence, id. at pp. 10, 14 (citing Dkt. No. 389).
On October 22, 2015, the Magistrate Judge entered an Order
granting this portion of Defendants’ Motion in Limine.
pp. 13–21.

Id. at

First, the Magistrate Judge determined that evidence

of Defendants’ withholding of documents is not admissible to
prove Defendants’ state of mind as it relates to Plaintiff’s
trademark infringement claims.

Id. at pp. 14–17.

Specifically,

the Order states that this evidence is “minimally probative” of
2

Defendants’ knowledge and intent in dealing with Plaintiff prior
to this litigation, and that its slight probative value is
outweighed by “a significant danger of causing unfair prejudice
and confusion of the issues, as well as misleading the jury,
unduly delaying the trial of this case, and wasting time.”

Id.

Second, the Magistrate Judge found that this evidence
cannot be used in support of Plaintiff’s claim for attorneys’
fees under O.C.G.A. § 13-6-11, because Defendants’ discovery
misconduct is not the type of prelitigaiton bad-faith conduct
that gives rise to attorneys’ fees under this statute.
pp. 17–20.

Id. at

Nor can discovery misconduct be used as

circumstantial proof of Defendants’ bad-faith conduct prior to
litigation, according to the Magistrate Judge, because the
probative value of this evidence for this purpose is outweighed
by the dangers discussed with regard to Plaintiff’s trademark
infringement claims.

Id. at pp. 17–18 n.10.

Third, and

finally, the Magistrate Judge determined that this evidence is
inadmissible to prove Plaintiff’s claims for punitive and
exemplary damages, as these claims also must be based on
prelitigation conduct of Defendants.

Id. at pp. 20–21.

Plaintiff now objects to the Magistrate Judge’s Order and
asks that the Court reverse or modify his ruling on the
admissibility of this evidence.

Dkt. No. 431, pp. 1, 5.

In

particular, Plaintiff argues that Defendants’ nondisclosure of
3

documents is relevant as “tend[ing] to show that . . . they knew
[that] they [had] obtained Plaintiff’s trade secrets improperly
and dealt with Plaintiff in bad faith” prior to this litigation.
Id. at p. 3.

Plaintiff contends that this evidence is further

probative of the claim for attorneys’ fees, because it explains
the “extraordinary amount of time and money” that Plaintiff’s
counsel spent to obtain discovery and, as such, goes to the
“reasonableness of the expenses of litigation.”

Id. at p. 4.

According to Plaintiff, the introduction of this evidence “would
likely take a matter of minutes”—given that it is undisputed
that Defendants withheld documents and subsequently disclosed
the same pursuant to Court Order—and thus does not present the
timeliness dangers contemplated by the Magistrate Judge.

Id. at

pp. 2–3.
Following the filing of Plaintiff’s Objections, the parties
jointly submitted a Motion to Replace such document with a
redacted version of the same.

Dkt. No. 434.

The parties assert

that a footnote in Plaintiff’s Objections quotes material that
has been marked “Confidential—Attorneys’ Eyes Only.”
1.

Id. at p.

Accordingly, the parties have included a proposed redacted

copy of Plaintiff’s Objections, which omits the quoted language
appearing in this footnote.

See id. at pp. 5–9.

Additionally,

Defendants subsequently filed a Response opposing Plaintiff’s

4

Objections and urging the Court to affirm the Magistrate Judge’s
Order.

Dkt. No. 438.
DISCUSSION

I.

Plaintiff’s Objections (Dkt. No. 431)
Under Federal Rule of Civil Procedure 72(a) (“Rule 72(a)”),

“[a] party may serve and file objections” to a Magistrate
Judge’s order on a nondispositive pretrial matter “within 14
days after being served with a copy.”

See also Local R. 72.2.

Rule 72(a) further provides that “[t]he district judge in the
case must consider timely objections and modify or set aside any
part of the order that is clearly erroneous or is contrary to
law.”

Fed. R. Civ. P. 72(a); see also Local R. 72.2.
Significant here is that relevant evidence is admissible

unless some federal constitutional or statutory provision or
other rule provides otherwise.

Fed. R. Evid. 402.

Evidence is

relevant if it tends to make a fact of consequence in a case
more or less probable.

Fed. R. Evid. 401.

Notwithstanding the

relevance of proffered evidence, a district court may exclude
such evidence if one of the following dangers substantially
outweighs its probative value: “unfair prejudice, confusing the
issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.”
(“Rule 403”).

5

Fed. R. Evid. 403

Contrary to Plaintiff’s Objections, the Magistrate Judge
correctly determined that evidence of Defendants’ discovery
misconduct and pending sanctions should be excluded from
Plaintiff’s case in chief under Rule 403.
16–17, 20 & n.3.

See Dkt. No. 426, pp.

As the Magistrate Judge noted, Defendants’

actions during this litigation—while perhaps indicative of their
knowledge and intent during the discovery period—would be only
slightly probative of their state of mind when the events giving
rise to this action occurred.

Id. at pp. 15, 20 & n.3.

Moreover, because Plaintiff’s trademark infringement claims and
claims for attorneys’ fees hinge on Defendants’ state of mind
and conduct prior to this litigation, evidence of their
misconduct during the discovery period is highly likely to
confuse the issues, mislead the jurors, and unduly prejudice
Defendants.
Plaintiff attempts to downplay the impact of this evidence
by repeatedly emphasizing the “undisputed” nature of the facts
that it seeks to introduce, including the facts that Defendants
initially failed to disclose documents and that Plaintiff’s
counsel had to obtain a Court Order to compel production.
e.g., Dkt. No. 431, p. 2.

See,

However, Plaintiff plainly states

that one of the purposes of presenting this evidence would be to
suggest that Defendants neglected to disclose the documents
because they knew that they had improperly obtained trade
6

secrets and dealt with Plaintiff in bad faith prior to this
litigation.

Id. at pp. 3–4.

As such, Plaintiff seeks to create

an inference through this evidence that most certainly would be
disputed and, as the Magistrate Judge found, would result in a
“trial within a trial” that would unduly delay the resolution of
this case.

Dkt. No. 426, p. 16.

Under these circumstances, the

Magistrate Judge did not clearly err in concluding that evidence
that Defendants withheld documents is inadmissible to prove
their liability for misappropriating trade secrets or otherwise
engaging in bad-faith conduct that would warrant an award of
attorneys’ fees.1
Nor did the Magistrate Judge err in finding this evidence
inadmissible to establish the amount or reasonableness of
Plaintiff’s claim for attorneys’ fees.

Indeed, Plaintiff

acknowledges that this evidence is only marginally probative of
the nature of its attorneys’ fees, in listing many other items
of evidence that it intends to introduce for this purpose: the

1
Defendants devote much of their Response to arguing that the
disputed evidence is inadmissible as direct proof of Plaintiff’s
entitlement to attorneys’ fees, citing the Magistrate Judge’s
discussion of in-litigation conduct as insufficient to underlie a
claim for attorneys’ fees under O.C.G.A. § 13-6-11. Dkt. No. 438, pp.
4–6 (citing Dkt. No. 426, p. 18). However, Plaintiff concedes in its
Objections that a fee award under the statute must be based on
prelitigation conduct, and challenges only the Magistrate Judge’s
exclusion of this evidence as circumstantial proof of the nature of
such conduct in this case. See Dkt. No. 431, pp. 4–5. Because it
appears that Plaintiff does not make any objection to the exclusion of
this evidence as direct proof of this claim, the Court need not
address Defendants’ arguments on this point.

7

contingent fee agreement between Plaintiff and its counsel, a
billing summary showing the number of hours that Plaintiff’s
counsel have worked on this matter, itemized lists of counsel’s
out-of-pocket expenses, and one attorney’s expert testimony
regarding the type and amount of work required of Plaintiff’s
counsel.

See Dkt. No. 431, p. 5.

To the extent that Plaintiff

is concerned about demonstrating the reasonableness of the hours
spent rectifying Defendants’ discovery misconduct, such a
showing could be subsumed by expert testimony validating, in
general terms, the reasonableness of the time devoted to various
discovery matters under the circumstances of this case.
Moreover, any additional support that evidence of Defendants’
discovery misconduct could lend to this inquiry would be heavily
outweighed by the potentially negative impact of this evidence,
as discussed supra.
The Court, however, reserves ruling on whether this
evidence may become admissible for purposes other than use in
Plaintiff’s case in chief.

Indeed, the parties have not

addressed alternative contexts, and the Magistrate Judge’s Order
does not cover the same.

Even so, it is conceivable that

Defendants could challenge Plaintiff’s evidence of the
reasonableness of its discovery-related fees, and, in such
circumstances, the probative value of Defendants’ discovery
misconduct, for rebuttal purposes, may outweigh its potentially
8

prejudicial effect.

In any event, the Court declines to

resolve, at this time, the admissibility of this evidence for
another purpose, and instead will take up this issue should it
arise at trial.2
Thus, Plaintiff’s Objections to the Magistrate Judge’s
Order are OVERRULED in their entirety.
II.

Parties’ Joint Motion to Replace (Dkt. No. 434)
Because it appears that Plaintiff’s Objections contain

material that the parties agree is confidential, and the
parties’ proposed redacted version adequately and appropriately
omits this material, the parties’ Joint Motion to replace this
filing with the redacted version is GRANTED.
CONCLUSION
Based on the foregoing, Plaintiff’s Objections (dkt. no.
431) to portions of the Magistrate Judge’s Order on Defendants’
Motion in Limine are OVERRULED.

Accordingly, the Magistrate

Judge’s Order (dkt. no. 426), as supplemented herein, remains

2
Defendants argue that the Court is already acquainted with the
evidence of Defendants’ withholding of documents, as the Court relied
on this evidence in ordering Defendants to produce the documents, and
thus need not be presented with this evidence at trial. Dkt. No. 438,
pp. 6–7. However, Defendants overlook that it is the jury, not the
Court, that will decide the claim for attorneys’ fees under
O.C.G.A. § 13-6-11, including the issue of the reasonableness of such
fees. SKB Indus., Inc. v. Insite, 551 S.E.2d 380, 385 (Ga. Ct. App. 2001)
(“Regardless of the amount paid, the reasonableness and value of the expenses
of litigation and attorney fees under OCGA § 13–6–11 were for the jury to
determine.” (citing Am. Med. Transp. Grp. v. Glo–An, Inc., 509 S.E.2d 738
(Ga. Ct. App. 1998), and Patterson & Co. v. Peterson, 84 S.E. 163 (Ga. Ct.
App. 1915))).

9

the Order of the Court.

In addition, the parties’ Joint Motion

to Replace Plaintiff’s Objections with a redacted copy thereof
(dkt. no. 434) is GRANTED.

The Clerk of Court is DIRECTED to

replace the document filed as Plaintiff’s Objections at docket
entry number 431 with the parties’ redacted version appearing on
pages five through ten of docket entry number 434.

SO ORDERED, this 1st day of December, 2015.

________________________________
LISA GODBEY WOOD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

10